Workers Compensation

Workers compensation coverage indemnifies workers for injuries arising out of or during the course of employment. The coverage is required by law in every state and is provided either through private insurance or, in a few states, through a regulated compensation fund. Benefits generally include medical expenses, death benefits, lost wages, and vocational rehabilitation. Workplace safety is an important part of controlling the cost of workers' compensation insurance. Insurance companies offer a variety of programs to help employers reduce or eliminate losses.

Workers' compensation is a complex coverage. Each state is the primary regulator of their own rules governing benefits, coverage, and premium calculation. So business owners operating in multiple states must understand the unique requirements of each jurisdiction. Also, premium calculations are based on a number of factors such as the class of business, payroll amount, lost cost modifiers, and experience modifiers. Plus, insurance companies generally offer a number of different rating plans.

Coverage Parts

There are usually two parts to a workers' compensation insurance policy. The first part of the policy transfers liability for all mandated benefits from the employer to the insurance company. The second part provides coverage to employees for work-related injury and illness that is not specifically required by law. Part two is an important liability protection for the business owner and is subject to the limits and conditions of the policy.